Feature

Bumpy road ahead for food logistics sector

Food and Drink logistics will face challenges from labour shortages and border controls after Brexit

The road ahead is potentially a bumpy one for businesses involved in the handling and storage of food and drink.

Brexit is expected to compound labour shortages and create new challenges around border controls. Meanwhile, pressure from tougher environmental controls will further complicate matters.

“Even before the referendum, Food Storage & Distribution Federation [FSDF] members across the UK were seeing a significant decrease in the number of drivers available to fill their vacancies,” says FSDF chief executive Chris Sturman.

An ageing workforce, unsociable hours and the lack of facilities are a few of the many reasons cited.”

One welcome development has been approval of a driving apprenticeship under the government’s Apprenticeship Trailblazers scheme, he says, which should encourage companies to attract younger drivers.

And the logistics sector is seeking high-tech solutions. “Wincanton is implementing streamlined ways of working; such as the use of automation,” says Ian Howe, Wincanton’s director of consumer services.

“Working across multiple markets gives Wincanton full visibility of our customers’ supply chains, meaning that we are able to co-ordinate counter-cyclical markets to make the best use of the labour that is available.”

Pat Maughan, chief executive of Hubbard Products, a UK manufacturer of refrigeration systems for static and transport requirements, says the concept of driverless trucks is one to watch.

“While the testing of convoys of driverless trucks on the UK’s motorways seems to have stalled, consideration has to be given to how refrigerated vehicles will be monitored while in ‘platoon’ mode,” he says.

“With chains of trucks linked electronically in road trains with synchronised braking and steering, advanced telematics will be needed to observe, manage and administer the cold chain.

“Hubbard Products’ units already feature in-cab controls for the management of cold compartments without need for the driver to leave his driving position. In future, more sophisticated ‘black-box’ technology will be required for remote monitoring and control.”

Brexit challenges (back to top)

Brexit is also creating concerns over border controls at points of entry and exit by sea and air across the UK, and the new land border separating the UK and the EU between Northern Ireland (NI) and the Republic of Ireland (RoI).

“The food logistics industry faces enormous challenges if the result of Brexit means a return to closed borders,” says Sturman. “With almost 30% of food imports coming from the EU and nearly a fifth of food and drink exports heading to Ireland, closed borders will have a significant effect, if not managed properly.

“Many more vehicles will be subject to checks, leading to increased waiting times and delays, which could well affect the supply of fresh products.

“Additionally, the areas surrounding UK port and land crossings will see a significant increase in the volume of vehicles being stopped and checked, which in turn will require more space and facilities for both lorries and drivers. Current terminal parking and service areas are inadequate.”

Sturman is skeptical over post-referendum promises by the NI and RoI governments to maintain a soft border.

“The border with Ireland is particularly complicated, with more than 200 known road crossings,” he says.

“It must also be borne in mind that, as a EU member, Ireland cannot choose to keep the border open. EU member states cannot make unilateral customs agreements regarding borders and the movement of goods and people.”

The FSDF has been working with government departments to highlight such issues, and is concerned about the capacity of Her Majesty’s Revenue and Customs’ new Customs Declaration Service to handle any significant increase in transaction volume following new border controls.

“If it is not up and running correctly and consistently, then there is a major risk that a substantial part of the UK food supply will grind to a halt,” says Sturman.

With currency-related volatility likely to continue over the short- to medium-term, Howe at Wincanton says logistics can play a key role in stripping out inefficiencies from manufacturers’ supply chains “to ensure they can continue offering value”.

“With better tracking and visibility, of inventory in particular, savings can often be found,” he adds.

Nagel Langdons believes its recent merger with Nagel-Group subsidiary, Nagel Logistics UK (NLUK) in Dover, leaves it well placed to handle Brexit, especially since the group has extended to 120 sites in 16 European countries.

“We are advocating British food and drink with a unique offer providing small to large suppliers the scope to connect with consumers across the UK and Europe,” says Nagel’s md Arran Osman.

A further issue for the logistics sector has been escalating environmental controls.

Urban congestion charges and related measures are not always successful, with the introduction of bike lanes causing greater congestion and emissions, says Sturman, while restrictions on large vehicle deliveries have resulted in more trips by smaller vehicles.

Environmentally-friendly solutions have become the chief driver of new developments, with a shift towards shared resources also complementing evolving consumer trends and a multi-channel approach to shopping.

Flexible asset base (back to top)

“Rather than requiring dedicated vehicles and warehouse space, food manufacturers need a flexible asset base that can flex with demand, but also not need to be maintained during quieter times,” says Howe.

“Collaboration is the solution. By using a third-party logistics provider to manage their fleets and warehouses, manufacturers can make their owned assets work for them.

“By having total visibility of the supply chain, we are able to reduce waste in the wider supply chain by encouraging closer collaboration, which means sharing vehicle space where possible between different customers.”

For Courier Express Refrigerated Transport, a foodservice distributor for clients such as Kepak UK, Gü Puds and Stateside Foods, a strong focus on telematics and real-time analysis of deliveries facilitates flexibility.

“Temperature and humidity levels are pre-set before distribution and tracked by the system in real-time, with alerts sent wirelessly to the refrigerated transport provider should conditions change,” says md John Lee.

“This enables immediate action to be taken to promptly address and correct any issues. Fleet tracking systems that monitor and analyse vehicle locality, fuel costs and even driver behaviour are also utilised, ensuring an efficient supply chain.”

Nagel Langdons has focused its attention on improving distribution efficiency for its customers.

“Nagel Langdons’ regional gateways greatly improve their customers’ access to market and reduce food miles by not only consolidating the last mile delivery, as is the case with a central hub model, but also the longer line haul or trunk lines between the major cities and retail regional distribution centre locations,” says Osman.

Shared logistics (back to top)

Martin Dougherty, a vice president at third-party logistics provider DHL Supply Chain, highlights collaboration as being vital in meeting the needs of converging food and drink supply chains, alongside integrated reverse logistics flows such as waste and recycling.

“Shared logistics networks improve efficiencies but also help manage seasonal demand,” says Dougherty. “At Christmas, for example, this can be up to 500% and the agility to do so favours the size and scale existing within our infrastructure.”

DHL lays claim to being the largest co-packer in the UK, and has worked with independent retail outlet Nisa to track and improve the efficiency of its own fleet and subcontracted vehicles.

DHL’s SmartPOD app links directly into Nisa’s existing Microlise system to provide vehicle location data and proof-of-delivery information in real-time, reducing overheads and creating faster payment cycles.

With Chancellor Philip Hammond announcing a review of red diesel use in urban areas earlier this year, Hubbard Products’ new transport refrigeration unit is claimed to be a world first with its liquid nitrogen power source.

Offering dramatic emission reductions, the new unit is said to meet standard limits for urban deliveries out-of-hours and has undergone a three-month commercial trial as an unbranded rigid vehicle used by Sainsbury to deliver chilled goods to stores throughout the London area.

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